calculate the reorder point

calculate the reorder point by considering lead time demand and safety stock. The formula typically used is: Reorder Point = (Average Daily Usage × Lead Time) + Safety Stock. This ensures inventory is replenished just before running out, avoiding stockouts without overstocking. Reorder point calculations are vital for inventory management, particularly in fast-moving or seasonal product categories. Using automated inventory systems allows for dynamic recalculations based on demand fluctuations. Optimizing reorder points boosts operational efficiency, customer satisfaction, and cash flow by aligning inventory levels with actual sales velocity and supplier performance.